AEP reports 3Q earnings boost on Texas court victory

A Texas Supreme Court award of $425 million to American Electric Power Company Inc. boosted the company’s third-quarter earnings to $928 million, about $1.93 per share.

Excluding income from the lawsuit and payments for losses on two plants and a settlement in Ohio, the Columbus-based utility earned $566 million, about $1.17 per share, up 2.5 percent from the third quarter last year.

“The Texas Supreme Court ruled in our favor in our appeal of state regulatory decisions regarding the recovery of stranded costs associated with the transition to retail competition,” CEO Michael Morris said in a release. “The court required the Public Utility Commission of Texas to use actual capacity auction prices, which is what we had used in our original filing a decade ago.”

AEP (NYSE:AEP) also settled an electric rate case that requires the company to contribute $5 million a year for economic development in Ohio. The settlement still requires Public Utilities Commission of Ohio approval.

The company also elected Nicholas Akins, 51, as CEO, replacing Morris, effective Nov. 12. Morris, 65, is set to retire Nov. 11 but will remain as non-executive chairman of the board.